Activism is about driving change. Shareholders turn to it when they think management isn’t maximizing a company’s potential. Activism can include anything from a full-blown proxy contest that seeks to replace the entire board, to shareholder proposals asking for policy changes or disclosure on some issue. In other cases, shareholders want to meet with a company’s executives or directors to discuss their concerns and urge action. The form activism takes often depends on the type of investor and what they want.
Institutional investors and hedge funds typically have the most impact. Individual investors may submit lots of shareholder proposals, but they usually lack the backing to drive real change.
To prepare for—and possibly to even avoid—shareholder activism, companies and their directors need to understand today’s landscape. Who are the activists? What are they are trying to achieve? When are activists more likely to approach a company? What tactics do they use? We break down the answers by the two main types of investors. Download our publication to learn more.